RBC lifts Fortive stock price target to $79, keeps Sector Perform

On Monday, RBC Capital Markets updated its financial outlook for Fortive Corporation (NYSE:FTV), a diversified industrial technology conglomerate with a market capitalization of $24.91 billion. Analysts at RBC Capital raised the company’s price target to $79.00 from the previous $78.00 while maintaining a Sector Perform rating on the stock. According to InvestingPro data, the company currently trades at $73.31, with analyst targets ranging from $67 to $116.

The adjustment comes ahead of Fortive’s two-part investor day in New York City, scheduled for June 10. The event is set to provide insights into the upcoming Ralliant spin-off and introduce the new CEOs for both Ralliant and the remaining Fortive entity, referred to as New-Fortive. InvestingPro analysis shows the company maintains impressive gross profit margins of nearly 60% and has received a "GOOD" overall financial health score, suggesting strong operational efficiency heading into the split.

During the investor day, New-Fortive is expected to conduct a portfolio review, focusing on its workflow management software and healthcare businesses. Analysts anticipate that New-Fortive will highlight its strong earnings visibility, bolstered by over 50% of its revenues being recurring. Meanwhile, Ralliant will present its long-term financial targets and strategy, emphasizing its position as a pure-play company in the test & measurement and sensors industry.

RBC Capital anticipates that the investor day will offer limited commentary on Fortive’s second-quarter and full-year 2025 guidance. The event is seen as a significant opportunity for both Fortive and Ralliant to set the stage for their future operations post-spin-off.

In other recent news, Fortive Corporation reported its Q1 2025 earnings, with adjusted earnings per share (EPS) of $0.85, meeting market expectations. However, the company’s revenue was slightly below forecasts, coming in at $1.47 billion compared to the anticipated $1.49 billion. Fortive has announced an expansion of its share repurchase program, adding approximately 15.63 million shares to its buyback plan, with a special purpose repurchase program worth up to $550 million. The company is preparing for a strategic spin-off of its Precision Technologies segment into a new entity, Ralliant Corporation, expected to be completed by the end of Q2 2025. Neill Reynolds has been appointed as the Chief Financial Officer for Ralliant, bringing over 25 years of financial leadership experience. Analyst firm JPMorgan has reiterated its Overweight rating on Fortive, maintaining a price target of $87, citing the company’s strong portfolio and strategic spin-off as positive indicators. Fortive’s Board of Directors has expressed confidence in the company’s future, emphasizing their commitment to shareholder value through these strategic moves.

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